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Types of Health Insurance
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Types of Health Insurance can be divided into two broad categories: Traditional and Managed Care. Within these two broad types of Health Insurance, there are four basic types of plans. They are Traditional Indemnity plans, PPO, POS, and HMO. It really depends on your needs and preferences when it comes in choosing a particular type of health insurance plan. While some people enjoy the autonomy offered by fee for service plans, while others may prefer the low costs associated with closed panel HMO.
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Traditional Health Insurance
Among the different categories of health insurance, the traditional health insurance was the most common in yesteryears. At present, it is also known as"fee-for-service." Traditional plans are like auto insurance. Here you need to pay a certain amount of your medical expenses and afterwards the insurance company pays the majority of the bill.
Managed care
Among the various types of health insurance, Managed care has been around since the 1930s. But it actually became very popular in the last 10 years. As this form developed, it left us with three basic types of managed care plans. At present, the majority of people with private health insurance have some type of managed care.
Although there are important differences among the different types of managed care plans, there are some similarities. All managed care plans involve an arrangement between the insurer and a selected network of health care providers, and they offer policyholders significant financial incentives to use the providers in that network.
Preferred Provider Organizations (PPOs)
One step over the managed care border is the Preferred Provider Organization. PPOs have made appropriate arrangements for lower fees with a network of health care providers. PPOs give their policyholders a financial incentive to stay within that network.
Point-of-Service (POS)
Point-of-service plans are like PPOs, but they introduce the gatekeeper, or Primary Care Physician.You will need to choose your PCP from the doctors among the plan's network.
Health Maintenance Organizations (HMOs)
HMOs are the least expensive, but also the least flexible type of health plan. They like to provide service among the group members than the individuals.
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